What's the difference between VARCHAR and CHAR?

VARCHAR is variable-length.

CHAR is fixed length.

If your content is a fixed size, you'll get better performance with CHAR.

See the MySQL page on CHAR and VARCHAR Types for a detailed explanation (be sure to also read the comments).

CHAR Vs VARCHAR

CHAR is used for Fixed Length Size Variable
VARCHAR is used for Variable Length Size Variable.

E.g.

Create table temp
(City CHAR(10),
Street VARCHAR(10));

Insert into temp
values('Pune','Oxford');

select length(city), length(street) from temp;

Output will be

length(City)          Length(street)
10                    6

Conclusion: To use storage space efficiently must use VARCHAR Instead CHAR if variable length is variable

A CHAR(x) column can only have exactly x characters.
A VARCHAR(x) column can have up to x characters.

Since your MD5 hashes will always be the same size, you should probably use a CHAR.

However, you shouldn't be using MD5 in the first place; it has known weaknesses.
Use SHA2 instead.
If you're hashing passwords, you should use bcrypt.

CHAR is fixed length and VARCHAR is variable length. CHAR always uses the same amount of storage space per entry, while VARCHAR only uses the amount necessary to store the actual text.

CHAR is a fixed length field; VARCHAR is a variable length field. If you are storing strings with a wildly variable length such as names, then use a VARCHAR, if the length is always the same, then use a CHAR because it is slightly more size-efficient, and also slightly faster.

In most RDBMSs today, they are synonyms. However for those systems that still have a distinction, a CHAR field is stored as a fixed-width column. If you define it as CHAR(10), then 10 characters are written to the table, where "padding" (typically spaces) is used to fill in any space that the data does not use up. For example, saving "bob" would be saved as ("bob"+7 spaces). A VARCHAR (variable character) column is meant to store data without wasting the extra space that a CHAR column does.

As always, Wikipedia speaks louder.

CHAR

• CHAR is a fixed length string data type, so any remaining space in the field is padded with blanks.
• CHAR takes up 1 byte per character. So, a CHAR(100) field (or variable) takes up 100 bytes on disk, regardless of the string it holds.

VARCHAR

• VARCHAR is a variable length string data type, so it holds only the characters you assign to it.
• VARCHAR takes up 1 byte per character, + 2 bytes to hold length information (For example, if you set a VARCHAR(100) data type = ‘Dhanika’, then it would take up 7 bytes (for D, H, A, N, I, K and A) plus 2 bytes, or 9 bytes in all.)

CHAR

1. Uses specific allocation of memory
2. Time efficient

VARCHAR

1. Uses dynamic allocation of memory
2. Memory efficient

The char is a fixed-length character data type, the varchar is a variable-length character data type.

Because char is a fixed-length data type, the storage size of the char value is equal to the maximum size for this column. Because varchar is a variable-length data type, the storage size of the varchar value is the actual length of the data entered, not the maximum size for this column.

You can use char when the data entries in a column are expected to be the same size. You can use varchar when the data entries in a column are expected to vary considerably in size.

Distinguishing between the two is also good for an integrity aspect.

If you expect to store things that have a rule about their length such as yes or no then you can use char(1) to store Y or N. Also useful for things like currency codes, you can use char(3) to store things like USD, EUR or AUD.

Then varchar is better for things were there is no general rule about their length except for the limit. It's good for things like names or descriptions where there is a lot of variation of how long the values will be.

Then the text data type comes along and puts a spanner in the works (although it's generally just varchar with no defined upper limit).

according to High Performance MySQL book:

VARCHAR stores variable-length character strings and is the most common string data type. It can require less storage space than fixed-length types, because it uses only as much space as it needs (i.e., less space is used to store shorter values). The exception is a MyISAM table created with ROW_FORMAT=FIXED, which uses a fixed amount of space on disk for each row and can thus waste space. VARCHAR helps performance because it saves space.

CHAR is fixed-length: MySQL always allocates enough space for the specified number of characters. When storing a CHAR value, MySQL removes any trailing spaces. (This was also true of VARCHAR in MySQL 4.1 and older versions—CHAR and VAR CHAR were logically identical and differed only in storage format.) Values are padded with spaces as needed for comparisons.